3 ways to stay in step with value-based reimbursement

This summer, the results were reported from the second in a series of national research studies on healthcare’s transition from volume to value, conducted by ORC International and commissioned by McKesson. “Journey to Value: The State of Value-Based Reimbursement in 2016” surveyed 465 payers and hospitals in March. The findings reveal that healthcare is well down the road towards full value-based payment. Andrei Gonzales, M.D., director, VBR Initiatives, McKesson Health Solutions, shares his insights in this second in a two-part series that originally appeared in McKesson’s Focus Ahead blog. If you missed part one, “Journey from Volume to Value Further Along than You Might Think,” read it here

Q: Is there anything your peers should be especially excited about from the trends shown in the study? 

Dr. Gonzales: One aspect that’s heartening to me is that patient outcomes, clinical measures, and patient experience are rated as a higher priority over cost of care when measuring the success of value-based reimbursement (VBR). There’s been a lot of focus on cost, so I think it’s important for providers -- especially practitioners such as physicians, nurses, pharmacists, physical therapists -- to see that the biggest focus is now on patient outcomes. That’s why we go into medicine in the first place: to help patients. The models have been set up first and foremost to incent better outcomes and that, in turn, drives lower costs. 

Q: Payers and providers alike are struggling to scale. Why is this and what’s your advice to reverse the trend?

Dr. Gonzales: This is where we’re really lucky in the way the study was structured, because we can turn to the data. We see that both payers and providers list automation of functions such as value-based payment reconciliation, data collection, data steerage, and risk adjustment as key investments and implementations they need to make to scale up. 

And this makes sense. You start off at a smaller scale and see if the models work. You throw away the models that don’t work and keep the models that do, with tweaks here and there to improve them. But if you then want to bring that to an enterprise-class scale, you need automation. It’s not realistic to hire an army of data analysts or care coordinators to keep doing the work manually. You start to automate what you can, and that’s the phase we’re in right now. 

Q: Let’s talk about differences between payers and providers. Tell us about the gaps for providers, and what payers can do to help providers close the gap. 

Dr. Gonzales: I don’t think there’s a lot of mystery now in terms of what it’s going to require for providers to close the gaps. It’s a matter of getting access to the data. Payers are further along on the continuum because they have more of the data they need to understand what needs to happen. Plus, they’re the ones setting up the incentives to help drive the change in care delivery that’s necessary to see results. We can’t just change the way we pay for something and expect it to automatically fix the problem. 

The changes in VBR are set up to incent, reward and help providers pay for the types of administrative changes they need to make to drive changes in clinical care. The process starts with changing the way we look at care, measure care, and benefit from the services they provide. Providers need help from payers to identify where there are opportunities for change, such as where the complications are occurring and where high-cost services could be lower cost. 

"Data is like oxygen to programs like value-based reimbursement."

For example, if I’m a surgeon, I have my own practice, I practice in the hospital, and my patients go to a skilled nursing facility. I don’t see any of their claims or any of their administrative data. I only know what those providers tell me or what my patients tell me. A payer can share that data for my patients, so I know what’s happening. 

For instance, here’s the actual cost of hospital A versus hospital B. You perform surgeries at both hospitals, and we’re going to start rewarding or penalizing you based on the total cost of care for your patients. I can see that hospital A is a lot cheaper than hospital B, and they also have fewer readmissions for their patients. I’m going to start doing more of my procedures at hospital A because of higher quality and lower costs. I’m also going to inform hospital B, so they have the data to address their deficits. 

Once providers see the information that payers can share with them, they get insights to see how well all the players are performing and can start making changes to improve care. 

Q: What specific steps should payers and providers take to make sure they are on track with CMS’s mandates and goals for payment tied to value? 

Dr. Gonzales: The first step is to understand what’s happening. Data is like oxygen to programs like value-based reimbursement. Providers need to make sure they have a full data set to give them the complete view of what’s happening across the continuum of care. They can work with CMS or commercial plans for that data, and step one for payers is to share the data. 

Step two is making sure they have the tools to analyze that information and gain the necessary insights for opportunities for improvement. We’re not talking about wholesale changes to the healthcare delivery system here but rather incremental process improvement. This is about figuring out what’s not working today and then looking for those opportunities. The data will help reveal that.

The third step is addressing those opportunities for improvement. Here’s where it’s not just looking internally, which is what they’ve always done, but across the continuum of care to actually improve care coordination and realize the improvements. Both providers and payers need to take this step. Providers need to do it within their local communities. Payers need to help facilitate it where it’s not happening and support it where it is happening. 

Get the full research report at MHSvbrstudy.com.

This post appeared originally in McKesson Corporation’s Focus Ahead for Better Health blog.

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